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2 pages/β‰ˆ550 words
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Style:
APA
Subject:
Accounting, Finance, SPSS
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Essay
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English (U.S.)
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Topic:

Organizational Reports to Stakeholders

Essay Instructions:

Read the Case Study 1-21 "Organizational Reports to Stakeholders" in Core Concepts of Accounting Information Systems, pages 29-30. -- Attached.
Write a 45- to 175- word response to each of the six questions in the case study.

1-21. Organizational Reports to Stakeholders

The annual report is considered by some to be the single most important printed document that companies produce. In recent years, annual reports have become large documents. They now include sections such as letters to the stockholders, descriptions of the business, operating highlights, financial review, management discussion and analysis , segment reporting, and inflation data as well as the basic financial statements. The expansion has been due in part to a general increase in the degree of sophistication and complexity in accounting standards and disclosure requirements for financial reporting.

The expansion also reflects the change in the composition and level of sophistication of users. Current users include not only stockholders but also financial and securities analysts, potential investors, lending institutions, stockbrokers, customers , employees, and (whether the reporting company likes it or not) competitors. Thus, a report that was originally designed as a device for communicating basic financial information now attempts to meet the diverse needs of an expanding audience.

Users hold conflicting views on the value of annual reports. Some argue that annual reports fail to provide enough information, whereas others believe that disclosures in annual reports have expanded to the point where they create information overload. The future of most companies depends on acceptance by the investing public and by their customers;therefore, companies should take this opportunity to communicate well-defined corporate strategies.

Requirements 

1. The mission of the US SEC is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. Identify severalways that the SEC accomplishes its mission.

2. The goal of preparing an annual report is to communicate information from a company to its targeted users. (a) Identify and discuss the basic factors of communication that must be considered in the presentation of this information. (b) Discuss the communication problems a company faces in preparing the annual report due to the diversity of the users being addressed.

3. Select two types of information found in an annual report, other than the financial statements and accompanying footnotes, and describe how they are usefulto the users of annual reports.

4. Discuss at least two advantages and two disadvantages of stating well-defined corporate strategies in the annual report.

5.Evaluate the effectiveness of annual reports in fulfilling the information needs of the following current and potential users: (a) shareholder s, (b) creditors, (c) employees, (d) customers, and (e) financial analysts.

Annual reports are public and accessible to anyone, including competitors. Discuss how this affects decisions about what information should be provided in annual reports

Essay Sample Content Preview:

Case Study
Student's Name
Institutional Affiliation
Instructor
Date
Question One
The U.S. Securities and Exchange Commission (SEC) was established in 1934 as an independent organization to assist in enforcing the law against market manipulation (Bryce, 2012). It contributes to improving the American economy, financial markets, and general quality of life. It has set missions to protect investors, promote capital formation, and ensure the maintenance of fair, orderly, and efficient markets to achieve its core goals. SEC rigorously enforces federal securities laws to safeguard investors, assisting in holding offenders accountable and discouraging them from further misbehavior. Its legislative framework offers organizations various revenue streams to access capital markets, enabling them to produce goods and services, develop new technologies, and offer financial opportunities to their investors. SEC regularly evaluates the market environment and makes necessary adjustments to the rules, operations, and oversight mechanisms to preserve fair, orderly, and efficient markets.
Question Two
a). There must be fundamental communication principles that a corporation must follow when giving annual reports to targeted users. To increase the report's efficacy, organizational management and communication teams must decide on its goal and ensure the report contains all pertinent data. Additionally, the customers' technical knowledge must be considered. When the intended audience lacks technical training, avoiding providing excessive information or details is vital. An organization should also decide strategically what it wishes to convey in the annual report. The information should be well-thought-out and present its contents engagingly.
b). Annual reports are one-way communication tools. Therefore, the preparer must emphasize clarity and conciseness because there is no instant opportunity to gain reader response to the messages. Another communication difficulty is information overload. Making an accurate yearly report is tricky since some target audiences might find it difficult to read the extensive material often provided in the reports.
Question Three
Annual reports include graphs, charts, and a sectio...
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